Program Report – Latino Community Credit Union

One of my more disturbing dreams is being lost in a town where I know I have a place to go but can’t find it, nobody can understand what I’m saying and my wallet seems to have disappeared. If the dream is really bad, I’m under-dressed…or worse.

Rotarian Jenny Levine introduced a program about the Latino Community Credit Unions mission to integrate immigrants into the financial mainstream. Our two presenters were Gabe Treves, a Development and Community Affairs Senior Specialist and Silvia Rincon, Director, Office of the CEO.

In the kindergarten class that Don Stanger and I tutored in this year, there were several Latino students who spoke virtually no English. The challenge with one young guy was to get him to even say his name and acknowledge your presence. Happily, by the end of the year, his natural gregariousness had fully emerged and the challenge was to get him to sit still for a few moments. He may not have won any reading awards, but at least he wasn’t so overwhelmed by the bad dream he was waking from. This ignited the flares of empathy and appreciation for the courage that it takes to face the difficulties of settling in a strange country, often with few resources.

Mr. Treves, who gave the bulk of the presentation, described another hurdle beyond school and language that immigrants must deal with when they come to this country, that is, integrating into the financial mainstream.

He shared some statistics on the growth of the Latino population in the state to help make a point about the importance of this. The Latino population in North Carolina in 1990 was about 76 thousand and represented about 1% of North Carolina residents. By 2015 the number had grown to almost a million people and 9.3% of the population.

As this population grew, many were forced into what Mr. Treves described as the informal financial sector. This is primarily cash based and “unbanked.” This isn’t unique to immigrants. For as long as I can remember, lower income workers turned their paychecks into cash and operated in this cash economy. Banks couldn’t make a profit on their accounts and didn’t welcome them and check cashing facilities took advantage of this and charged high fees for minimal services. The informal system also provides no path to a credit history and is generally unreliable. Without a credit history, it is difficult to get good rental housing, good insurance, quality jobs and good loans.

It’s also dangerous. Living in the informal cash economy made many immigrants easy targets for thieves. Mr. Treves didn’t mention this, but often the lack of documentation and threat of deportation means that some victims are unwilling to involve the police. One interesting statistic that Mr. Treves supplied was from a study from the University of Virginia’s Darden School that showed that in cities where there were branches of the LCCU crime had decreased on average of almost 5%.

So, how do they do it? First, they provide access, now with twelve branches across the state. They also use the largest ATM network in the state. The second arm of their program is to provide what they call ethical financial products. One example he cited were DACA loans to fund the costly application process for President Obama’s “Dreamers,” that is, kids that were brought here illegally as children and were subject to deportation even though they broke no laws themselves and know no other home but the US. He described the purpose of this approach as empowering rather than profiting and they price their deposit and loan products to be very affordable. The final leg is education. They run regular classes in financial literacy for members and others in the community.

So what are the metrics? Currently they have over 68,000 members including about 11,000 here in Durham. They have over $240 Million in assets, have financed over $480M in loans and have a loan repayment rated of 99.8%. They have helped over 2500 first time home buyers and have graduated more than 1,500 folks from their financial education classes. Their clients represent 122 different countries.

Ms. Rincon joined Mr. Treves at the podium for a lively question and answer period. There is nobody that knows Durham better than DCVB CEO and Club Vice President Shelly Green and she commented in admiration that we all learned something from the presentation.